Student Loan Forgiveness First Time Home Buyer

The U.S. Small Business Administration issued a one-page application form that aims to simplify the process of applying to forgive Paycheck Protection Program loans, along with newly updated and revised forms to conform to the requirements of the most recent stimulus legislation. 

Congress approved the COVID-19 relief package in the month of March and included $284 billion of financing for small-scale businesses who needed loans. This money was used to mitigate the economic effects of the coronavirus outbreak. It included a requirement for the SBA to issue streamlined forms within 24 days of the legislation being approved by the lawmaker to streamline the application process for forgiveness. It also included conditions that aim to increase the number of loans from community banks, especially for minority-owned companies that were unable to obtain loans in the past.

Student Loan Forgiveness First Time Home Buyer

“The Small Business Administration met the requirement to issue the one page form for loan forgiveness under the PPP by 24 days after the date of the enactment of the Consolidated Appropriations Act, 2021,” wrote Ed Zollars who is a partner of Thomas, Zollars & Lynch CPAs, on his Current Federal Tax Developments blog for Kaplan Financial Education. “The agency also published the updated forms.”

First Draw PPP Terms of loan forgiveness

Student Loan Forgiveness First Time Home Buyer – For eligible borrowers, First Draw PPP loans can be qualified for loan forgiveness. This applies when the loan payment is made within an 8 to 24-week period.

  • The same goes for the pay and benefits for employees.
  • The loan proceeds are spent on payroll and other eligible expenses; and
  • A minimum of 60% of the funds go to the cost of payroll

Second Draw PPP Conditions for loan forgiveness

Second Draw PPP loans to eligible borrowers are eligible for loan forgiveness if the loan is paid within an 8to 24-week period.

  • The First Draw PPP loan requires that the employee and compensation levels be maintained in the exact same way.
  • The loan proceeds could be used to cover expenses for payroll or other expenses that are eligible.
  • A minimum of 60% of the profits go towards payroll costs
  • How and when to apply for loan forgiveness

A borrower may apply for forgiveness only after the loan’s proceeds for which the borrower wants forgiveness have been used. The borrower can request forgiveness anytime up until the date of maturity of the loan. If the borrower does not apply for forgiveness within 10 months of the date of expiration of the covered period and the loan is not renewed, PPP loans are no longer deferred, and borrowers must make loan payments to their PPP lender.

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